With the new LTL freight classification rules in effect as of July 19, many have been asking us what the impact will be on their shipping costs.
The bad news is that some companies aren’t prepared to handle these types of changes—they either don’t have the expertise or the necessary data to make the right alterations to their processes. Recently, I came across a company that lost almost thousands of dollars in less than a week simply because they didn’t know how to adapt their supply chain to the current environment! Extend that out over a year and you’re talking some very serious money.
The good news is we can help. Let’s schedule a time to talk about how TranzAct can help you reduce your costs even as changes like reclassification, tariffs, and more occur.
As an example, companies that have been taking advantage of our tariff assessments and LTL assessments have been seeing an ROI in just 2-4 weeks. We would love to put that expertise to work for you.
To address any company specific questions, we’re offering the opportunity to connect with our Logistics Director, Jeff Horwath. He has decades of logistics experience and can help you navigate freight classification or any other LTL topics. For those interested in a general update, here are a few items to know.
First of all, know that on an immediate basis, these changes are unlikely to affect your LTL costs. We work with a wide network of LTL carriers and every carrier we talked to plans to honor their existing contract. That means the rules that were in effect prior to July 19 will continue to apply until a new contract becomes effective. Subsequent to shooting this video, we learned that FedEx is providing a 150-day grace period – which will take you until around January 1 – so that shippers can have additional time to make the changes necessary to ship their LTL freight under these new rules. Whether there are other carriers making changes, you need to know that eventually all major LTL carriers will put the new freight classifications into effect.
So why wait to get started? TranzAct is available to help your company figure out the best strategy to manage the impact of this change right away.
Second, know that the LTL carriers typically have much better data than shippers. One piece of information that many shippers do not have today is the dimensions of the freight. Whether your company simply uses a tape measurer or invests in a dimensionalizer, this information is important to collect and know ahead of negotiations. If you don’t capture the dimensions of the freight being moved, you’re basically relying on the carrier and accepting their numbers.
Third, know that many companies have the opportunity to lower their LTL costs by making changes to their processes. We’ve been working with companies to help them know what adjustments to make and how to make them. If you’re looking for help, we can start with a strategic LTL assessment. This has been effective with helping our customers reduce their LTL costs even when rates are going up. We also have a program called Freedom Logistics that provides shippers with tools for managing LTL freight and a network of LTL carriers.
If you’re interested in learning more about how the LTL freight classification changes will affect your company or anything else, just give us a call at 630-833-0890 Ext 190, send me an email, or schedule a time to meet via Calendly.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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